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China's growth has recently been spectacularly high but there have been expressions of concern about its uneven regional distribution. It has been asserted that this has been partly due to national financial institutions (mainly state-owned banks) redirecting deposits from poor to rich regions and that this will be improved by smaller regionally-focussed institutions. We test these propositions using both informal analysis and more formal econometrics employing recent panel time-series methods. We find that (i) there is no evidence that deposits are siphoned off from the poor provinces for loans in rich provinces; (ii) financial disparities are positively related to output disparities, (iii) the link is stronger for rural credit co-operatives than for state-owned banks and (iv) the relationship is causal in both the long and short runs. [ABSTRACT FROM AUTHOR]

The financial crisis was followed by a period of extraordinary monetary policy easing. This period of quantitative easing and zero interest rate policies had significant effects on financial markets and created a global investment environment dominated by a single global factor of central bank policy. Looking forward, “normal” markets should include: (i) higher interest rates, but lower in the steady‐state than pre‐crisis; (ii) greater cross‐country interest differentials; and (iii) lower cross‐asset return correlations. In this environment, idiosyncratic macroeconomic differences across countries matter more than a “risk on/off” global factor that dominated in the post‐crisis era so that the opportunity set for global macro investors should be better than it has been in the 10 years since the crisis. The future investment environment will not be simply that of the pre‐crisis era but will reflect the evolution of the world economy. No single country in this evolution is more important than China and the changes ahead in China will create both risks and opportunities for investors. [ABSTRACT FROM AUTHOR]

This paper concerns the financial stability during the crisis. It introduces the experience of Chinese commercial banks. The Chinese commercial banks emphasise social responsibilities, which contributed to improve the stability of the Chinese financial system, while the increased financial stability brought tremendous positive effects to the development of economy, society and also the commercial banks themselves. We argue that in China, both the government and the financial authority enhance the commercial banks' social responsibility. There are sufficient incentives for the staff of commercial banks to increase the achievements of enhancing the social responsibilities under effective formal institutions. We further argue that, although the legal foundations of China and the EU are different, it is possible for the EU Member States to learn from China to increase the financial stability by enhancing the commercial banks' social responsibilities. We find that because the EU has much more developed financial markets, it is possible for the EU to create effective institutions and legal framework to achieve that goal through the market mechanisms. [ABSTRACT FROM AUTHOR]

The article presents author's views related to State Enterprise Reform in China for improving the economy of China. Topics include role of State owned enterprises (SOEs) in the internationalization of Chinese economy, business funded by SOE through the state-owned banking sector, and contribution of SOE in the economic stabilization of country.

Trust in banks is essential to financial system effectiveness. The present study examines the determinants of trust in banks in China. Using the most recent wave of the World Values Survey, which included information on trust in banks from the survey in China in 2012, we perform ordered logit estimations to investigate the potential influence of a large set of individual and provincial indicators on trust in banks. We observe the influence of certain sociodemographic indicators. Membership in the Communist Party and living in a rural area are negatively associated with trust in banks. Age and satisfaction with financial situation contribute to higher trust in banks, while being married and having a higher level of education tend to lower trust in banks. Access to information regardless of the type of media disseminating the information (newspapers, television or Internet) seem to have no impact on trust in banks. Economic values influence trust in banks. In particular, individuals who favour inequality as an incentive for individual effort or support an expanded government ownership role in the economy tend to trust banks more. [ABSTRACT FROM AUTHOR]

The authors discuss aspects 2008 global financial crisis in the perspective of the Chinese philosophical concept of Yin and Yang. They state that sustainable equilibrium in the global financial system will necessitate balance between healthy financial innovation and financial stability. The authors consider the changes in supply and demand balance in the local banking crisis as analogous to Ying and Yang forces changes.